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Recent key developments in MAKE│NZ
Last night we held our Fireside Chat looking at tariffs – The economics of trade sanctions – (when) do they make sense? as presented by Dr Onur Koska from the University of Canterbury. We did start the chat on a lighter note, with some information about Dawn Aerospace and what it’s like to be on the MAKE│NZ board, a unique Venn diagram of an experience that could only be presented to us by Charlie North.
With handouts from Dr Onur, we went through a history of tariffs, going right back to looking at the Kindleberger Spiral which showed the month-month decline in global trade during the Great Depression of 1929.
We jumped ahead to the growth and drive of globalisation in the eighties to the early 2000s, where trade barriers and transportation costs were declining. And then we moved into our current own uncharted waters. A key take away being that “What happens in a trade war? Everyone’s gonna lose. A third party might win in the short term, but long term everyone loses.”- a relevant point both historically speaking and in todays trade climate with a certain nation.
While we certainly don’t know what to fully expect going forward, having this added historical context and sharing in Dr Onurs knowledge certainly meant those in attendance walked away with a better understanding of what’s happening and what could potentially happen.
If you’re sad to have missed out on this Mondays Fireside Chat, make sure to contact the MAKE│NZ team to get on the invite list for our next event!
Do you find you learn best from others’ experience? Are anecdotes, case studies, and workshops your idea of a great way to acquire and share knowledge? Well, do we have the event for you.
In conjunction with SouthMACH, on May 28th the MAKE│NZ manufacturing conference will return – this time focusing on productivity at all levels within a manufacturing business, especially those at the operations level. And it’ll be full of anecdotes, case studies, and workshops- just like you like!
Make sure to get your tickets here, and see if you’re eligible for discounted tickets as a community member!
Recent key developments in New Zealand
• It’s about time for a good-news story among all the negative headlines and feeling of uncertainty. This one I came across in the Frankfurter Allgemeine Zeitung [FAZ], a leading German newspaper, of all places. The FAZ runs a daily Technology and Automotive News section, in which I discovered this:
Even if your German isn’t that great, you’ll probably have noticed the words ‘Neuseeland’ and ‘Kindling Cracker. The Kindling CrackerTM essentially is an ‘inverted axe’ where the wood is forced onto a stationary blade, rather than the blade being driven into the wood (https://www.kindlingcracker.com/collections/nz-products ). The idea goes back to a school science project of Taranaki-born Ayla Hutchinson. When she was 13 years old, Ayla witnessed her mother accidentally cutting her finger while splitting kindling for use in the family’s wood burning stove. This incident sparked the interest of Ayla who thought that there must be a better, safer way to split firewood – or so the story goes.
To date, over a million Kindling CrackersTM have been sold world-wide by the company, which is still in the Hutchinson’s family ownership, with about half of that in Europe, and Canada and the USA being other major markets. In 2018, the Kindling CrackerTM was even celebrated on a NZ Post stamp:
So, how does a clever invention, conceived of in rural Taranaki, halfway between Inglewood and Stratford, make it to the world’s markets and a glowing review in one of Germany’s biggest daily newspapers in a place where normally the latest smartphone is being reviewed? Sounds like a real success story for New Zealand manufacturing, then? Well, sort of …
It certainly helped that Ayla’s dad, Vaughan Hutchinson, was an engineer with a mindset for invention. And that Weta Workshop had a hand in the final design of the product. Not to mention the story at the core of the brand – schoolgirl from little down-under New Zealand makes wood splitting safer all over the world …
The Hutchinson family also sought protection for its intellectual property [IP] early on. A trademark for “HA KINDLING CRACKER” was obtained in 2014, and a national New Zealand patent was granted in 2016. They also sought trademark protection in key markets and filed for an international patent application under the PCT in 2013, entering the national phase in seven countries: Australia, Canada, China, Japan, New Zealand, South Africa, and the USA; and one region — Europe. (PCT) route. The PCT [WIPO Patent Cooperation Treaty] is an international patent application filing system that helps applicants seek patent protection in over 150 countries with a single application. The final granting of the patents is still up to the discretion of the national or regional IP offices during what is referred to as the “national phase”.
The not-so-good news: after an early fall-out in 2015 with the original manufacturers contracted by the Hutchinson family, Precision Foundry in Auckland, the product has been manufactured in Australia ever since. Precision Foundry at the time was the only New Zealand manufacturer able to take on the mass-manufacturing the product, but a 65% price rise by the company not long after the start of manufacturing made the Hutchinsons look elsewhere. Today, the product is mass-manufactured by Intercast & Forge in Adelaide, Australia’s largest iron foundry.
The other bit is that their significant investment in IP protection didn’t really pay off for them. In a Facebook post of August 2018, the company stated that “We are working with our legal teams around the world to have ones which infringe our intellectual property removed from these sites along with a few others. Unfortunately, even with all of our Granted Patents and Trademarks around the world it is taking some time to get them removed.”
The sad reality is – they haven’t succeeded yet, and they won’t. Enter “kindling splitter” in the search bar on Amazon.com, and you get the genuine article at a ridiculous price (AUD 585.50), or you can get look-alikes – some closer than others – for as little as AUD42.27. Six of them on the first page alone. None of these are cast in one piece like the original product, with the pieces holding the cutting blade welded or screwed together.
There is a painful lesson in this that others will also have learnt: patenting – especially internationally – is a poker game that only really big wealthy companies can win, because only they can credibly bluff. That is true in particular for B2C product inventions with a low barrier to market entry for competitors, i.e. where it is technically easy to produce equivalent or copycat products and the potential market is quite big. The World Intellectual Property Office [WIPO] and your local patent attorney will likely tell you otherwise, but …
The only way to win is to have a superior product with a well-crafted brand story (they do), sold and distributed through a wide and competent distributer / dealer network (which they have, by the look if it), and keep innovating – they recently released a larger ‘king-size’ model.
So – it can be done: invented in New Zealand, and the world knows about (see also last week’s Newsletter, #28). Just a pity that it didn’t turn out to be a manufacturing success story for New Zealand.
Recent key developments in the World
• “Germany is in a polycrisis” – a statement that appears more and more frequently in the German media. What individual risk factors contribute most to that perception is in the eye of the beholder. If we go by the key themes in the recent federal election campaign, it would have to be the war in Ukraine and the fear of an (imminent) Russian attack on Europe, (allegedly uncontrolled) immigration, and a ‘crumbling infrastructure’ – road, rail, public buildings like schools and hospitals, etc. ‘Climate change’, the leading concern in the 2021 elections, came in as a distant fourth. And when we look at the new government’s plans to spend the extra €1T-plus (yes – trillion) in new debt, these priorities are confirmed.
What doesn’t feature in the political debate is Germany’s demographic crisis. Like most other economically more advanced countries in ‘the West’ and in Asia, Germany’s population is in decline, even with immigration. Model calculations for the late 2050s predict a drop in population between 14 and 29%. The cause is the same as everywhere else – Germany’s Total Fertility Rate [TFR] is well below what is required to maintain a population at a steady state – 2.1 births per woman:
The result – even today – is a population ‘pyramid’ that is no long a pyramid – it looks more like a Coke bottle:
When we look at the impact of this, we don’t need to go all the way out to the 2050s:
Worth noting here is that the biggest skills shortages aren’t (going to be) in the technical / trade jobs, but for salespeople and key ‘social’ areas: childcare, social workers and nurses.
Proposed fixes:
– attracting more mothers (back) to work
– targeted training initiatives – we can see there will be plenty of supply of semi- and unskilled workers
– skilled migrants, and
– extending the age of retirement. Germany has quite rigid rules, and an stablished culture, when it comes to the age of retirement. Combined with relatively generous retirement incomes, this leads to low level of employment beyond retirement age – 13% of those in the 65-74 age group are still in work. New Zealand’s rate is almost twice that: 25%.
Anyway – that’s Germany. Not our problem. Or is it?
Moreover, New Zealand is part of an international network of labour pools that attract migrant workers – and as the numbers show, a disproportionally large one. Plus, English is an official language here.
In 2003, there we nearly 81m international migrant workers. In 2022, the number was 167.7m – a doubling over 20 years. Given the negative demographic trends in key economies, the expectation has to be that the global competition for migrant workers, especially (highly) skilled ones, is most likely to increase. Will it be as (relatively) easy as it appears to be today, to attract the migrant workers we need in 2030 and beyond?
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